Failing Coal Phase-Out, Even Japan... Strong Drive for Renewable Energy

Asahi's 17 European Factories to Switch to Renewable Energy by 2025
Targets 100% Global Renewable Energy by 2050
Unprecedented Blueprint from Manufacturing Company

Japan Passive in Preventing Global Warming

Concerns Over Losing Competitiveness in the International Community

Acceleration of Coal Phase-Out Since Suga’s Inauguration

[Asia Economy Reporter Kwon Jaehee] Asahi Group has unveiled a blueprint to switch all the electricity used in its 17 factories across Europe to renewable energy by 2025. The policy is to convert all factories worldwide to renewable energy by 2050. Asahi Group, which owns a total of 76 factories globally, currently uses renewable energy at a rate of only 8%. The goal is to raise this to 100% by 2050, starting with Europe.

While such movements have been seen mainly in the information technology (IT) sector and financial institutions, it is considered unusual for a manufacturing company, which faces difficulties in switching to renewable energy, to set a goal of realizing a coal-free society.

◆Acceleration of Decarbonization After Suga’s Inauguration= Japan, which had been given a ‘failing grade’ in realizing a coal-free society, is changing. Japan is the fifth largest emitter of carbon dioxide in the world but has been criticized for its passive stance on global warming prevention measures. Until now, Japan showed ambiguous attitudes by not clearly setting deadlines for zero carbon dioxide emissions, such as ‘an 80% reduction by 2050’ or ‘early realization of a decarbonized society by the latter half of this century.’ In contrast, 123 countries worldwide, including South Korea, have already declared their intention to reduce greenhouse gas emissions to zero by 2050.

Japan’s change in stance began when Prime Minister Yoshihide Suga officially declared the transition to a decarbonized society in his first official speech after taking office. On October 26, in his first speech at the extraordinary Diet session, Suga announced ‘net zero carbon emissions by 2050’ and released a detailed implementation plan titled ‘Green Growth Strategy for Realizing a Decarbonized Society by 2050.’ The plan aims to reduce greenhouse gas emissions to zero by 2050, containing specific figures such as deadlines and targets, showing a stronger will than before. Furthermore, there is a push to codify the implementation plan into law, signaling a strong determination not to abandon the transition to renewable energy even if the administration changes in the future.

The target of ‘converting 50-60% of total electricity to new renewable energy by 2050’ was also formalized. Japan is the only country besides the UK to present such specific figures for the power generation mix 30 years ahead.

Additionally, Japan announced plans to convert all passenger cars sold in Japan (new cars) to electric vehicles (EVs) and hybrid vehicles (HVs) by the mid-2030s. This pace of transition is considerably faster than other countries, to the extent that Toyota, Japan’s largest automobile company, has protested, saying, “At this rate, it will be impossible to produce cars in Japan.”

◆Japanese Business Community Joins, Announces ‘Challenge Zero’= The Japanese business community has also launched a project to realize a coal-free society by 2050. Keidanren, Japan’s largest economic organization, announced the ‘Challenge Zero’ project at the end of last month, aiming to reduce greenhouse gas emissions to zero by 2050. This is a follow-up to the Japanese government’s ‘Green Growth Strategy for Realizing a Decarbonized Society by 2050.’

Japan’s strong drive toward renewable energy transition stems from a sense of crisis that failure to reduce carbon emissions could lead to losing competitiveness in the international community.

Sony, a representative Japanese company, criticized the Japanese government, saying, “Recently, investment decisions are being made based on ESG (Environmental, Social, and Governance) principles, and Japan’s weakness in the renewable energy sector reduces its competitiveness in attracting foreign investment.”

In fact, companies that fail to reduce carbon emissions are being shunned in the market. Last year, Sarasin & Partners, a major British asset management firm, sold 20% of its shares in Royal Dutch Shell, the world’s largest oil company. They sent a letter to Shell stating, “Your company is heavily investing in fossil fuels, threatening the safety of the planet,” and “Capital should be invested in solutions, not causes, of climate change.”

BlackRock, the world’s largest asset management company, is also disposing of bonds and stocks of companies whose revenue from coal exceeds 25%. It has demanded that invested companies announce climate change-related eco-friendly strategies. Larry Fink, CEO of BlackRock, warned, “The climate crisis is an investment crisis,” and “Countries and companies that do not address this issue will fall.”

◆Japanese Government Establishes ESG Management Disclosure System= Accordingly, the Japanese government has decided to establish a system to disclose related information so that global investors can easily understand the ESG management status of Japanese companies. The plan is to use the expanded overseas investment in companies as funds for realizing a coal-free society.

Additionally, the Japanese government plans to create economic indicators reflecting environmental factors such as ‘Green Gross Domestic Product.’ Prime Minister Suga stated, “We will attract global green investment funds to Japan and link them to job creation and economic growth.”

This content was produced with the assistance of AI translation services.